Why use developer contributions at all?
There are limitations with using a soley rates based method of funding infrastructure, particularly for alignment with landuse – infrastructure planning. For example, Council effectively has to ‘borrow’ funding to deliver the infrastructure first then set a rate to recover the costs over the life of that infrastructure – the standard of service is then limited to what and when Council can afford to ‘borrow’ rather than what population growth etc is demanding. The developer contribution system enables Local Government to require developers to pay their share of the infrastructure costs ‘up front’, aligning infrastructure delivery with demands from growth and easing the burden on the local council financial capacity. These systems also provide more accountable and transparent mechanisms for allowing large developments to provide such infrastructure ‘in kind’ – with ongoing operation, maintenance and depreciation costs (enabling replacement at end of life) to be funded from the rate base.
